Wealthy seek opportunities to “invest” mortgage debt

Investec, the international specialist banking group, has found that wealthier clients looking to purchase a property via a mortgage, are seeking loans with a difference.

Many of the bank’s clients can be described as “high net-worth individuals” and this group has shown a strong interest in the bank’s multi-currency mortgage.

This particular product allows for flexibility, but also entails a certain amount of risk.

The loan is secured against a UK property but can be denominated in a range of currencies, such as Sterling, the US Dollars, Euros, Swiss Francs and Japanese Yen.

This allows borrowers the opportunity of benefiting from lower interest rates and reducing the balance of the mortgage by engaging in switching between the different currencies, as their values rise and fall.

According to Andrew Arlott, a spokesperson for Investec: “Your general high net-worth individual is often looking for either innovative or advanced features on their mortgage. The multi-currency side of things … fits in very much with a lot of high net-worth clients who are used to investing their cash and are quite happy to invest their debt in a similar way.”

A recent survey by Halifax Estate Agents shows that the number of homes in the UK valued at over £1 million has increased threefold over the past five years.

Discuss this in the Finance Markets forums

Story link: Wealthy seek opportunities to “invest” mortgage debt